Social insurance administration is driven by headcount movement and runs on tight deadlines. Late notifications create arrears and interest for the company, and interrupt entitlements for the employee.
Background
Employers must register and contribute to social insurance, health insurance and unemployment insurance for employees within scope, at prescribed rates on the salary used as the contribution base.
Foreign employees working in Vietnam are also within the scope of compulsory social insurance under current rules, with certain differences in the benefits available compared with Vietnamese employees. This is an area many FDI companies are not fully across.
The difficulty here is not technical complexity but continuity. Every joiner, leaver, salary change or period of statutory leave generates a filing with its own deadline.
Common challenges
- Late increase and decrease notifications. The most common failure. It produces arrears and late payment interest, and leaves employees without cover at the moment they need it.
- Incorrect contribution base. Confusion over which allowances form part of the contribution base creates differences that accumulate across years.
- Foreign employees not registered. Omitting foreign staff who fall within compulsory coverage is a frequent gap in FDI companies.
- Benefit claims returned repeatedly. Sickness and maternity claims with missing documents delay payment to employees and reflect poorly on the HR function.
- Delayed book closure on exit. Employees who cannot obtain their insurance book on time are unable to continue contributions at their next employer, which regularly leads to complaints.
How TrustlineAX helps
- Registration completed correctly. Initial registration of the company and all employees for social, health and unemployment insurance.
- Movements filed on time. Joiners, leavers, unpaid leave and salary changes processed within the applicable deadlines.
- The right contribution base established. Your pay structure reviewed to determine precisely which components form the contribution base.
- Employee claims managed to payment. Sickness, maternity, convalescence and occupational accident claims prepared, filed and followed until the employee is paid.
- Books closed promptly on termination. Insurance book closure processed and handed over on time when employment ends.
- Periodic reconciliation. Contribution records reconciled with the social insurance agency so differences are found early rather than as a large arrears figure.
How we work
- Current position review. Registered headcount, contribution levels and any outstanding items.
- Data alignment. Employment contracts reconciled against registered data and discrepancies corrected.
- Ongoing process setup. A fixed contact and monthly cut-off for headcount changes.
- Routine processing. Movements, benefit claims and book closures handled as they arise.
- Reconciliation and reporting. Periodic reconciliation with the agency and a status report to you.
Frequently asked questions
Do foreign employees have to contribute to social insurance?
Foreign employees working in Vietnam fall within compulsory social insurance under current rules, subject to conditions relating to the type of work permit held and the term of the employment contract. It should be assessed case by case.
What happens if notifications are late?
The company must pay the shortfall together with late payment interest, and may face administrative penalties. The more serious consequence is usually the interruption to employee entitlements.
Which pay components form the contribution base?
The contribution base comprises the salary level, salary allowances and specified additional amounts as defined in the regulations. Not every payment to an employee is included, so it needs to be assessed against your actual pay structure.
Can we handle this in house?
You can, but the workload scales quickly with headcount and turnover. Many companies outsource it so their HR team can concentrate on recruitment and people development.